Oil Production up in 2006, Survey Reports

LAWRENCE--Kansas oil production will increase by just over five percent in 2006, as compared to 2005, according to year-end estimates from the Kansas Geological Survey, based at the University of Kansas.

The state's oil production will total about 35.7 million barrels this year, according to geologist Tim Carr, head of the Survey's energy research section. That compares to 33.9 million barrels last year. After a decade of production declines that began in the mid-1980s, production has increased or held steady every year since 1999.

The total value of 2006 Kansas oil production is estimated at $2.2 billion, up about $400 million over 2005.

Natural gas production will drop slightly in 2006, from 381 billion cubic feet to 369 billion cubic feet. That decrease in production, along with lower natural gas prices in 2006, led to a drop in the value of natural gas produced. Total value of gas produced in the state in 2006 is estimated at $2.4 billion, down about $400 million from the previous year.

In all, said Carr, total value of oil and natural gas production in Kansas in 2006 will be about $4.6 billion.

"That's down slightly from 2005, but it's still much greater than it was in the 1990s, when average value was generally in the range of $1.5 to $2.5 billion," said Carr.

"The increased value is good news for increased rural economic activity, income to royalty owners, and state and local tax revenue."

One area of increasing natural gas activity is the production of methane from underground coal beds in eastern Kansas. That production has gone up from five billion cubic feet in 2005 to an estimated 23 billion cubic feet this year.

"Exploration for coalbed methane continues to have a big impact on drilling in the state," said Carr. "Overall, more than 2500 oil and gas wells were completed in 2006. That's more than double the rate of completions in the mid-1990s, and a great deal of that increase is related to exploration for coal bed methane."

Overall drilling is still down substantially from its peak in the 1981, when more than 5000 wells were drilled in the state.